Digital financial institution Monzo is partnering with accounting know-how agency Sage to launch a brand new, built-in tax submitting software geared toward sole merchants and landlords. The characteristic will enable Monzo Enterprise prospects to file tax returns on to HM Income & Customs (HMRC) from inside their banking app, a transfer designed to simplify compliance with the UK’s upcoming Making Tax Digital (MTD) for Earnings Tax laws.
A waitlist for the brand new software opens right this moment, with the complete product anticipated to launch in time for the brand new tax 12 months when the MTD guidelines come into impact. The answer is powered by Sage’s Embedded Providers know-how, which brings accounting and tax compliance capabilities into the platforms that companies already use.
Addressing the Making Tax Digital problem
The brand new software is designed to handle the challenges posed by HMRC’s MTD initiative, which would require sole merchants and landlords to maintain digital information and submit quarterly tax updates utilizing accepted software program. In response to analysis from Sage, nearly half (49 per cent) of sole merchants are nonetheless unaware of the MTD adjustments, whereas over half (55 per cent) of those that are conscious worry the executive burden of the brand new quarterly submission necessities.
Monzo’s built-in answer goals to scale back this complexity and price by eliminating the necessity for separate accounting software program. The software will complement present options throughout the Monzo Enterprise account, comparable to spending categorisation, receipt attachment, and ‘Tax Pots’ for setting cash apart. This permits prospects to arrange for, save for, and file their taxes inside a single software.
“Managing taxes is likely one of the greatest complications for sole merchants and landlords,” mentioned Jordan Shwide, basic supervisor of enterprise banking at Monzo. “That’s why we’re making tax submitting easy with a built-in software, powered by Sage, that lets prospects file on to HMRC from their Monzo Enterprise checking account. That is one more step in constructing the one app that helps small and rising companies confidently handle all of their enterprise funds with Monzo.”
Embedded finance for tax compliance
The partnership is an instance of Sage’s technique to fulfill small companies the place they’re by embedding its providers into their present monetary instruments. The corporate’s Embedded Providers know-how makes use of a modular suite of APIs to permit companions like Monzo to combine accounting and compliance options instantly into their very own platforms.
“For small companies, tax can really feel sophisticated, however by means of our embedded accounting know-how and our partnership with Monzo we’re making tax compliance easy and seamless contained in the app they already use to run their funds,” mentioned Gordon Stuart, svp, operations, fintech & embedded providers at Sage. “This collaboration is a transparent instance of Sage Embedded Providers in motion, assembly prospects the place they’re and enabling companions to ship trusted providers within the instruments enterprise homeowners already use daily.”
The MTD for Earnings Tax guidelines are a part of a phased overhaul of the UK tax system. From April 2026, sole merchants and landlords incomes over £50,000 will probably be required to conform, with different incomes brackets being phased in in subsequent years. Monzo presently has over 700,000 enterprise prospects.
